FFA declares ‘war’ on Arla as price talks fail

FARMERS FOR Action has declared war on Arla Foods UK after the milk processor failed to reverse its recent price cut at a “hostile” meeting with farmers’ representatives.

FFA leader David Handley had originally given Arla’s newly installed chief executive Tim Smith until Monday, June 13, to rescind the 0.35p/litre decrease announced at the beginning of the month.

That deadline was extended after Mr Smith asked for more time to find a solution, but time had now run out, said Mr Handley.

“I have failed. If we can’t win this the peaceful way, we’ll win it the other way.”

FFA members picketed Arla’s sites at Ashby and Sheffield Park last night and more action was on the way, Mr Handley promised.

“Now we are going to start on the retailers.”

But Mr Smith said the firm would not negotiate its milk buying arrangements in the public and would not be reversing the cut.

Arla had actually lost £3.6m by delaying its price cut beyond April as originally planned, he added.

John Kinnaird, NFU Scotland president, said “I didn’t hear a single justifiable reason for Arla cutting the farm-gate milk price when market developments are positive.”

NFU dairy board chairman Gwyn Jones said he thought Mr Smith was a man he could do business with but it appeared he was the victim of Arla selling its milk too cheaply.

“It looks like he is caught between reversing the cut or issuing a profits warning to his shareholders.”

Mr Jones said the retailers had some questions to answer because Arla was claiming that not all of the recent retail price initiative was being passed back to them. He said he also did not understand why AFMP would not use its influence to get the cut reversed

But the NFU would still be “doing whatever it takes” to get the cut reversed and would not accept cuts from anybody else, said Mr Jones, who was worried that other processors would follow suit.

“If processors are finding holes in their budgets they need to go to the retailers. We are not going to keep filling them.”

Robert Wiseman Dairies was due to make a decision on July prices on June 22 but a spokesman said the decision had been delayed.

“We need time to digest Arla’s refusal to rescind its milk price cut and assess its impact on the market,” he said.